It’s the circle of life at its finest: using beer to generate electricity, and then using that electricity to brew more beer.

The Alaskan Brewing Company in Juneau, has hit upon a clever recycling plan. The brewery installed a $1.8 million boiler last year that takes the mashed-up, waterlogged grain – the primary waste product from its brewing operations – and uses it to create steam in order to keep its kettles cooking.

The newly-created steam is then used to boil the wort, the malted barley mixture created before fermentation. And in the recycling process, the spent grain is also dried out, making it lighter to ship away from the brewery. ( Used grain is the brewing company’s biggest waste products, since it’s unusable to the brewery.)

In this Jan. 16, 2013 photo, the upper level of Alaska Brewing Company’s new spent-grain burning system churns out thermal energy in Juneau, Alaska.

Brewers across the world ship their grain to farms for use as animal feed, but there’s not a large market for it in Alaska, given the state’s small agricultural industry. What’s more, Alaska’s capital is only accessible via sea or air, making it prohibitively expensive to ship the spent grain out of town. “We had to be a little more innovative just so that we could do what we love to do, but do it where we’re located,” Alaskan Brewing co-founder Geoff Larson told the Associated Press.

Installed thanks in part to a grant of nearly $500,000 from the U.S. Department of Agriculture, the boiler is too new for the brewery to yet realize the financial benefits. But plant manager Curtis Holmes tells the Anchorage Daily News that the new installation is expected to cut its fuel consumption by as much as 70 percent and save $1.5 million in fuel costs over the next 10 years.

Alaskan Brewing is relatively small in its operation, only brewing 150,000 barrels each year. (By comparison, America’s most popular beer, Bud Light, sold more than 39 million barrels in 2011.) While it’s yet to be seen if other brewers — and bigger ones, at that – will catch on to using the waste product for its energy, Alaskan Brewing’s plan makes for perhaps the coolest barroom story: “Why yes, my beer was powered by old beer.”